Economy boosts Pinnacle sales

By Nicola Mawson, Contributing journalist

Johannesburg, 23 Feb 2007

JSE-listed Pinnacle Group this morning reported strong revenue growth in the last six months on the back of good macro-economic fundamentals and internal strategies.

In a statement to shareholders, the company says it benefited from strong local and international economies, a stable rand and the "culmination of past and ongoing initiatives to diversify the product range and distribution channels available to the group".

Pinnacle told shareholders turnover was up 87%, to R729 million from R390 million a year ago. Internal activity aided revenue growth as it has now fully consolidated 100% of Explix Technologies, and focused its product offerings as well as increased penetration into retail markets.

"Organic growth, as determined by excluding the consolidation of 50% of Explix Technologies, accounted for 56% of the increase in revenue," it said. Net profit moved up from R16.8 million to R33 million, and cost containment strategies helped push down expense growth.

Compared to the corresponding period between July and December 2005, the infrastructure and support division grew by 57%, software by 120% and ICT services by 92%.

Pinnacle acquired 50.1% of DataNet Infrastructure Group on 6 October 2006. "As a network infrastructure distributor, DataNet provides cabinets, cabling and networking peripherals to resellers and installers in the South African market," says Pinnacle. DataNet's figures are not reflected in Pinnacle's interim results.

Broadband growth

Looking ahead, the company expects to benefit from the introduction of various technologies as broadband becomes a focus. "The availability of broadband solutions at affordable rates is expected to introduce new communication, entertainment and management technologies to corporate and private clients, inevitably driving the demand for technology software, hardware and services," it says.

Pinnacle adds it is well placed to meet these technology requirements to enable efficient and secure use of connectivity solutions.

It says it has already received orders from various institutions for delivery in the first quarter of 2007. "These orders are expected to notably contribute to the operating results of the period ending 30 June 2007."